Thats very likely.
In segments like hand washes, it has happened and the same is not likely to reverse.
If I remember correctly, Nisaba Godrej of GCPL brought out that pan India Handwash penetration pre Covid was in single digits. Today, it stands at mid 30 pc. And the same in unlikely to reverse.
So…thats already a big change.
Exactly, and this…
I would say that it is a welcome move. The presence of organised / branded players in this space is limited. The runway for growth should be descent.
Plus TTK already has the distribution network in place. I think, they can easily push Tableware at a slight premium to local brands without incuring additional costs. This should be earnings accretive from the word go.
Thats my initial reaction.
As far as I remember they are entering steel items for tableware to start with.
Anyway this will be third party manufacturing.
Cipla Q2 concall highlights -
Company has been able to sustain a good share of cost optimizations initiated in Q1 into Q2. EBITDA at 1177 cr, margins at 23.4 pc. Revenues up 15 pc yoy at Rs 5038 cr, India revenues up 17 pc yoy, PAT at 665 cr at 13.2 pc of sales, weakness in acute portfolio more than overcome by COVID and chronic portfolio, private branded South Africa mkt grew by 9 pc, tender business grew 28 pc, US generics reported a revenue of $ 141 million supported by Albuterol, healthy margin expansion in US business.
Overall contribution of COVID products - less than 5 pc in revenues and EBITDA. R&D costs at 226 cr, all priority projects on track , expect R&D spends to increase going fwd as respiratory assets progress in clinical trials.
Cipla’s rank in domestic respiratory segment -1, overall rank - 02 in chronic therapies. Consumer health ( OTC ) revenues at 180 cr for H1 - seeing very healthy growth.
US business well supported by Albuterol, Esomeprazole oral suspension, DHE nasal sprays ( for migraine headaches ). Launched dimethyl fumarate ( for multiple sclerosis ) in Q2 - a limited competition product. Across the three Albuterol products - Proventil, Proair, Ventolin…Cipla’s generic mkt share at 11 pc. Generic pipeline - Advair and other complex inhalation products progressing well. US business profitability trending almost same as overall business inspite of Cinacalcet being in base.
Cipla’s mkt share in SA ( private mkt ) - 7 pc, in SA OTC - 8.2 pc. Fastest growing pharma company in SA. Have entered in exclusive partnership with Alvotech ( a biopharma company ) for commercialization of 5 biosimilar candidates in immunology and oncology. European ops grew 24 pc YoY.
Excluding COVID products, India presciption growth at similar levels as that of IPM ( mid single digits ). Including them, India presciption business grew by a mid teens.
As of now, company doesnt believe that pricing is too much of an issue with Albuterol in US. Intend to keep gaining mkt share, at a gradual pace.
Company hoping to save more than 400 - 500 cr this yr due digital technologies and maintain the same henceforth. Growth in South Africa mkt growth - sustainable. The same has been happening for last 8-9 qtrs.
Truvada ( used for HIV / Hep B treatment ) - launched by Teva ( FTF - big opportunity ). Cipla is the API supplier. Its a descent product for the company.
Cipla investor PPT summary -
Overall sales - 5038 cr - up 15 pc YoY, India sales up 17 pc YoY, US sales at $ 141 million vs $ 135 million YoY, SA sales up 14 pc YoY
Ebitda - 1177 cr- up 29 pc YoY, margins at 23.4 pc up 266 bps, PAT - 665 cr - up 41 pc.
India revenues - 41 pc
US - 21 pc
SAGA - 18 pc
Europe - 5 pc
Emerging mkts - 9 pc
APIs - 4 pc
Cash balance - 3623 cr vs 2008 cr in Mar 2020, Net Cash - 453 cr vs (-) 807 cr in Mar 2020
Disc : invested.
Dr Reddy Q2 concall summary -
North America growth - 28 pc
Europe growth - 36 pc
India growth - 21 pc
EM growth - 4 pc
PSAI growth - 20 pc
R&D costs at 436 cr, increase of 19 pc YoY, at 8.9 pc of sales. EBITDA at 1267 cr, margins - 25.9 pc - slightly above company’s aspiration of 25 pc EBITDA margins. PBT at 862 cr after absorbing an impairment cost of 78 cr on certain products. Effective tax rate for the qtr was 11.6 pc, expected to be 25 pc for the full year. PAT at 762 cr at 15.6 pc of sales. Free cash generated at 603 cr. Net Debt at 136 cr- reflects the strength in balance sheet.
Mkts in India, Russia and other branded mkts witnessing recovery, however still below pre COVID levels. North America - sales at $247 million, up 22 pc, growth supported by new moleculesoffsetting lower doctor visits and elective procedures. Launched 9 new products in NA including some limited competition and first to mkt products like - ciprofloaxin dexamethasone OTC suspension ( eye drops - used after eye injuries ) , Diclofenac OTC gel, Olopatadine OTC eye drops ( for allergic reactions ). Company on track to launch 30 products this fiscal vs initial tgt of 25 products. H2 may also see launch of some limited competition products. US pricing pressure is lower vis a vis previous years.
Europe sales at 43 million euros, up 22 pc. 3 new launches in Germany, 01 each in UK, Italy, Spain, Austria. Europe business base is low, can grow multifold. EM sales at 864 cr, up 4 pc. Sequential uptick seen in Russia, CIS countries and China. Launched 28 new products across EMs.
India sales at 912 cr, growth at 21 pc, 46 pc QoQ growth. Wockhardt business performing ahead of Mkt expectations. Launched Remdisivir, Favipiravir in India.
PSAI - business at $ 115 million, up 14 pc. Growth partly due higher API inventories carried by customers to protect against COVID shocks. This may get normalised going forward. Still, this business may be a key growth driver supported by sectoral tailwinds, improvement in cost positions, new product development.
Biologics - Phase 3 trials of Rituximab ( used in treatment of Lymphoma )are progressing well. Also working on next wave of bio similars which are in different stages of development.
There was a detailed discussion on Sputnik V vaccine. I am deliberately not writing anything about it as we never know which vaccine will finally click.
Disc : invested
Alembic Pharma Q2 concall highlights -
Sales at 1457 cr - up 17 pc, EBITDA at 455 cr - up 33 pc, EBITDA margins at 31 pc, PAT up 35 pc at 333 cr. Half Year revenues up 28 pc at 2800 cr, EBITDA up 61 pc at 871 cr, PAT up 72 pc at 635 cr.
Capex for the Qtr - 168 cr. H1 capex at 311 cr. Total capex with pre operatives at 1825 cr ( includes all CWIP ). Fin assistance to Aleor JV for HY at 65 cr. Total investments in aleor at 742 cr. Money raised via QIP during the qtr at 750 cr…used for partial payment of debt and for funding future growth. Gross borrowing stands at 600 cr vs 1440 cr in Jun 2020. Cash in hand at 273 cr. Net debt / equity at 0.07- thats comforting !!!
Q2 India sales at 415 cr, up 6 pc. Good uptick seen in Sep. Very good growth in Oral Azithromycin. Good improvements seen in Gastro and Gynecology, they were previously lagging. Company expects strong growth in Q3 in India business. Company putting in a lot of efforts to accelerate Uro, Antibiotic and Cardio portfolios. Cough and Cold , Pediatric segments showing negetive growth - in line with mkt.
Intl business - Good growth in API and Generics business. R&D at 13 pc of sales at 185 cr ( this is always high at Alembic vs peers ). Launched 3 products in US in Q2. Expect to launch 5-6 more in Q3 !!! The drug discovery venture - Rhizen has outlicensed its oncology molecule Umbralisib to TG Therapeutics. TG is targetting Umbralisib’s regulatory clearence for CLL ( chronic lymphocytic leukemia ). Rhizen also entered licensing arrangement to develop and commercialize its second oncology product Tenalisib with Curon Bio Pharma.
Intl formulations sales at 779 cr, up 21 pc. US generics at 582 cr, up 8 pc. Last years base was high. Ex- US sales at 197 cr, up 84 pc.
API sales at 263 cr, up 30 pc.
Above guidance provided to allay fears and to assert that the current business is sustainable.
The 450 cr additional expenses brought out for FY 22 will be of reccuring nature every year ( this includes depreciation on new plants and there wont be any capitalization ) . These are likely additional operating expenses for new plants.
Total launches in first half - 6. Launches lined up for second half- 10 to 15. So, company may end up with 15-20 launches for the full yr. Next year - similar numb of launches or slightly more. Injectables launches - next year. Pricing pressures in US - manageable.
API capex now being easier to execute due faster environmental clearences vs past due govt focus. Some API capacity expansion already underway.
Company aims to hit a $ 400- 500 million kind of revenues in US - 3 yrs from now. Growth drivers - Injectables, Onco - Injectables, Derma and Opthal products. Presently, company is clocking roughly $ 300 million annual US sales.
Management admits that hitting the first $ 500 million revenues in US is not as hard as growing from thereon. They dont want to get into biologics and bio similars due heavy upfront investments. They will evaluate future growth opportunities only after stabalising the current capex…so that may be 2 yrs from now.
Disc : invested.
Ajanta Pharma Q2 highlights -
Ajanta Pharma vs IPM -
Opthal - (-) 1 pc vs (-) 1 pc
Cardio - 10 pc vs 13 pc ( underperformance )
Derma - (-) 2 pc vs 4 pc ( underperformance )
Pain Management - 8 pc vs 1 pc ( outperformance )
Overall - 4 pc vs 5 pc ( underperformance )
Last 4 yr growth Ajanta vs IPM -
FY 17 - 16 pc vs 9 pc
FY 18 - 6 pc vs 6 pc
FY 19 - 16 pc vs 11 pc
FY 20 - 13 pc vs 11 pc
HY 21 - 4 pc vs 5 pc
Cardio - 44 pc
Opthal - 29 pc
Derma - 20 pc
Pain Management - 7 pc
Opthal - 2nd
Derma - 14th
Cardio - 16th
Pain management - 39 th
Overall - 31st
US business - 33 products on shelf, 37 final approvals, 19 under approval, focus on sound execution for customer delight
US sales at 154 cr vs 111 cr
Africa branded sales - 112 cr vs 82 cr
Asia sales - 180 cr vs 181 cr
Africa institutional sales - 51 cr vs 72 cr
Overall exports - 499 cr vs 447 cr
India sales - down 1 pc
Export sales - up 12 pc
Overall - up 8 pc
R&D expenses at 29 cr vs 40 cr YoY at 4 pc of sales
Last 5 yr R&D spending trend ( as pc of sales ) -
6 pc, 8 pc, 9 pc, 9 pc, 6 pc
Formulations -
3 facilities in Aurangabad
1 facility in Dahej
1 facility in Guwahati ( Opthal bloc - to commence production in Q4 )
1 facility in Pithampur ( newly comissioned )
1 facility in Mauritius
APIs -
1 facility in Walunj ( captive consumption )
Total sales - 716 cr vs 643 cr, up 11 pc
EBITDA - 274 cr vs 178 pc, up 54 pc, margins at 38 vs 28 pc
PAT - 170 cr vs 116 cr, up 46 pc
EBITDA expansion due - lower cost of RW as a percentage of sales, lower other expenses as a percentage of sales
Disc : invested.
Notes from Godrej Agrovet Q2 results -
Sales at 1732 cr vs 1862 cr , down 7 pc
EBITDA - 181 cr vs 131 cr, up 38 pc
EBITDA margins at 10.5 vs 7 pc
PBT at 150 cr vs 81 cr, up 84 pc
PAT at 115 cr vs 102 cr, up 13 pc - last year had a tax writeback of 33 cr
Sales mix -
Animal feed - 44 pc
Oil Palm plantation - 13 pc
Crop protection - 19 pc
Dairy - 14 pc
Poultry and processed food - 9 pc
Animal feed - 29 pc
Oil palm plantation - 14 pc
Crop protection - 47 pc
Dairy - 2 pc
Poultry and processed food - 6 pc
Animal feed sales at 762 vs 938 cr
Animal feed results at 47 cr vs 43 cr
Sales degrowth - due lower demand for end protien products ie milk, chicken eggs
Margin expansion - due lower RM costs
Oil Palm plantation sales at 293 vs 236 cr
Oil Palm results at 41 vs 28 cr
Sales and results supported by higher yeilds and higher end product prices
Crop protection sales at 176 cr vs 200 cr
Crop protection results at 29 vs 55 cr
New launches in first half - Delete Aqua and
Impool-X - both herbicides
Astec lifesciences - sales at 155 vs 140 cr
EBITDA at 31 vs 17 cr
Projects for capex, backward integration on track to be completed this yr
Godrej Agrovet holds 57 pc in Astec Lifesciences
Creamline dairy sales at 259 cr vs 306 cr
EBITDA at 11.2 cr vs 9.1 cr
Slowdown in OOH consumption, improvement seen in Sep, Oct
GAVL re branded the Jersy Brand
Godrej Tyson foods sales at 143 cr vs 107 cr
EBITDA at 9 cr vs (-) 11 cr
Growth in Non Veg - 28 pc, Veg - 8pc
GAVL holds 51 pc in Godrej Tyson
JV in Bangladesh ( animal feed ) - sales at 327 cr vs 262 cr
GAVL holds 50 pc stake
EBITDA for this was not reported in Investor ppt
Disc : invested
Laurus Labs Q2 concall highlights -
Launched TLE 400 ( combo drug- tenofovir, lamivudine and efavirenz ) in LMIC mkts during the Qtr. Good growth expected going ahead. Good growth also seen in North America and Eurpean Mkts. TLE also launched in US.
In Europe, contract mfg of certain non - ARV formulations doing very well. Have robust order book for FY21. Also have 2 products in Europe, will launch 1 more this yr.
Company de-bottlenecking FDF capacities. The brownfield expansion under way will be avlb in a phased manner over next FY.
Gereric APIs ( ARVs ) grew 20 pc qoq due higher volumes of Tenofovir and Efavirenz. Customers also buying more of Lamivudine and Dolutegravir.
Oncology API sales up 40 pc yoy led by key product- gemcitabine.
Other APIs ( PPI, Cardio, Anti diabetic ) grew 18 pc yoy due higher volumes of existing products and demand from contract mfg partner. Company has higher order book for APIs and has expanded capacities. **Overall - management very optimistic about growth in API business going fwd.**Plan to add even more capacities.
Synthesis business up 36 pc yoy. Currently, they have 50 projects, 04 have gone commercial.
H1- capex at 262 cr. Some of it should be operational in Q3 and Q4. Earlier budgeted capex for FY 21 and 22 was 700 cr, now revised upwards to 1200 cr due higher demand across various segments. Most of this will be brownfield. One greenfield unit at Hyderabad for FDFs also planned. This 1200 cr also includes another API mfg plant at Vizag.
Company doesnt feel that higher API sales are due to stockpiling by customers ( fearing a second COVID wave ). Company expects lower demand from Efavirenz but higher demand for Lamivudine, Tenofovir and Dolutegravir. Company expanding capacities of Tenofovir and Lamivudine.
In the next 2-3 yrs company expects 50 percent business from ARVs ( APIs + Formulations ) and the rest 50 percent form Custom Synthesis + Non ARV ( APIs + Formulations ). Currently, it is 60:40.
As additional capacities become avlb in late Q3 and Q4 ( as brought out in Para 5 above ), company may see even higher growth than Q2.
Total capacity after capex completion( in 18 months or so ) - additional 30 pc for APIs and additional 80 pc of Formulations capacity.
TLE mkt moving towards TLD mkt. Company has absolute leadersip in Efavirenz but Evafirenz mkt is moving towards Dolutegravir. Now the company is strong in Dolutegravir as well. And because of backward integration in all molecules, there is great cost advantage with the company.
Broad capex split of 1800 cr - 40 pc on APIs, 40 pc on formulations and 20 pc on custom synthesis.
CDMO - currently working on 50 molecules, 04 commercialized. Company has interesting molecules in various clinical stages. Not all would be successful. Company also doing contract manufacturing of certain APIs and Formulations but they are not considered under the Custom Synthesis division.
Overall Revenue split -
Contract Mfg of APIs - 10 pc
Contract mfg of FDFs - 10 pc
Custom synthesis - 10 pc
Company has 7 APIs where their global mkt share is > 25 pc. Company intends to take this number to 15 APIs.
Future growth drivers -
APIs - new APIs in Non ARV and Onco space
FDFs - ARV, Non ARV in LMIC mkts, US and Europe
Custom Syntheseis - High potent steroids and Hormones
Disc : invested
Portfolio Update -
I ve reduced my holdings of Alkem Labs, Ajanta Pharma, Alembic Pharma in the last 2-3 days.
Reason - Over the Covid affected period, I did add a lot of Pharma names in my portfolio. Other names include - Laurus, Divis, Aarti Drugs, Sun, Cipla, Dr Reddy, Natco, Abbott, Syngene, Granules.
After having the studied the sector for over last last 6 months, I have developed a prefrence for players that are either highly backward integrated/ are API makers/ have a well laid out speciality / complex generics pipeline.
Therefore, trimming the players that are - so to say, pure generic makers.
Added - HDFC BANK, TTK Prestige.
I know, I am a little late in adding HDFC bank.
Lets see how it plays out.
Regards,
Ranvir Dehal
Sun Pharma Q2 concall highlights -
Sales at 8458 cr , up 6 pc yoy and up 13 pc qoq. Speciality revenues were at $108 million. Speciality R&D spend at 37 pc of total R&D spends. EBITDA at 2099 cr, up 30 pc yoy. EBITDA margins at 24.8 pc. Adjusted NP at 1590 cr, up 49 pc yoy.
India Business - Sales at 2531 cr, up 1 pc yoy. India sales - at 30 pc of consolidated sales. Good growth in Chronic, recovery in semi chronic, de growth in acute segment.
Launched 22 new products in Q2 in India. India mkt share at 8.2 pc.
Current US pipeline - 92 ANDAs, 6 NDAs.
RoW sales at $ 178 million, up 10 pc yoy. RoW sales at 16 pc of revenues. RoW sales driven by good traction in Japan, Europe and Taro’s RoW business.
API sales at 510 cr, up 9 pc yoy. R&D expenses at 613 cr - 7.2 pc of sales.
Disc : invested
Some excerpts from Sun Pharma’s latest AR wrt their Speciality Products -
Total speciality revenues at - $ 430 million - aprox 3100 cr ie 9 pc of total revenues.
Speciality product launches in US in last 1 yr -
CEQUA in Oct 19 - for dry eye disease - aprox 1.6 cr patients in US.
ABSORICA LD in Feb 20 - capsules for management of severe recalcitrant nodular acne.
EZALLOR SPRINKLE capsules in Jul 19 - for treatment of elevated lipid disorders in people who have difficulty swallowing ( mostly aged patients ).
DRIZALMA SPRINKLE in Oct 19 - an SNRI drug used is psychiatry for treatment of derpression for patients who have difficulty in swallowing ( mostly aged patients ).
New Mkts for speciality products -
Launched ILLUMYA ( Tildrakizumab - for plaque psoriasis ) and CEQUA in greater China via licensing arrangements with CMS China. Also helps Sun enter greater China mkt - second largest pharma mkt in the world.
Also launched ILLUMYA in Japan.
Entered licensing arrangement with Hikma Pharma for selling ILLUMYA in MENA region.
In Nov 19, Sun Pharma entered into a licensing arrangement with Astra Zeneca to introduce a novel Infusion therapy Oncology drug. Sun will file, get regulatory approvals and make and supply this to Astra to be sold in China.
In Jan 2020, Sun entered into an exclusive licensing arrangement with Rockwell Medical to commercialise TRIFERIC ( iron replacement and haemoglobin maint drug ) in India. Rockwell will get royalty payments on the sale proceeds.
Sun Pharma’s manufacturing footprint -
Formulation facilities - Total 29
Country wise -
India - 14
US - 3
Japan -2
Canada - 1
Hungary - 1
Israel - 1
Bangladesh - 1
South Africa - 1
Malaysia -1
Rommania -1
Egypt - 1
Nigeria - 1
Russia - 1
API manufacturing facilities - Total - 14
Country wise -
India - 9
Australia - 2
Israel - 1
US - 1
Hungary - 1
Current portfolio breakdown -
Bajaj Finserv - 10.7 pc @ 6300
HDFC AMC - 2.1 pc @ 2400
HDFC Bank - 4.1 pc @ 1410
Icici Lombard - 1.8 pc @ 1270
TTK Prestige - 3.4 pc @ 5900
V Guard - 2.1 pc @ 168
Aarti Industries - 2.1 pc @990
Godrej Consumer - 3.7 pc @ 540
Marico - 3.3 pc @ 280
HUL - 10.3 pc @ 1850
Dabur - 5.6 pc @ 410
Britannia - 8.6 pc @ 2700
Nestle - 4.9 pc @ 11500
Godrej Agrovet - 1.9 pc @ 440
Tata Consumer - 2.1 pc @ 490
ITC - 1.5 pc @ 200
Syngene - 2.2 pc @ 450
Aarti Drugs - 2.1 pc @ 250
Cipla - 1.4 pc @ 600
Dr Reddy - 2.1 pc @ 3900
Divis Labs - 5.7 pc @ 2400
Granules India - 1.9 pc @ 300
Laurus Labs - 3.7 ps @ 111
Natco - 2.5 pc @ 720
Sun Pharma - 2.3 pc @ 498
Abbott India - 4.24 pc @ 16300
RIL - 3.6 pc @ 1630
Cash - NIL
Recent exits / reductions - Shilpa medicare ( at a loss ) , Alembic Pharma, Alkem Labs, Ajanta Pharma
Recent buys / additions - TTK Prestige, HDFC bank, Tata Consumer
I intend to add some more of HDFC bank, provided it consolidates / corrects at present levels. Will have to trim some other stocks as I have exausted most of my cash.
Regards,
Ranvir Dehal
Portfolio Disclosure -
Resorted to mild trimming in HUL.
Increased- HDFC Bank.
My total exposure to financial stocks was around 19 pc. I intend to gradually take it up to 22-25 pc range.
Regards,
Ranvir Dehal
Some data wrt General and Life insurance companies -
GENERAL INSURANCE
Company…Premium Collection till Nov 20 …Growth ( YoY ) …Mkt Share
LIFE INSURANCE
Disc : holding Bajaj Finserv, Icici Lombard
Some notes from RIL’s 2019-20 AR ( not exaustive ) -
Area-
17.7 Million Sq Ft
22 Million Sq Ft
28.7 Million Sq Ft
18.66 cr
30.67 cr
38.75 cr
Rs 1,15,694 cr - global investors in Jio platforms
Rs 53,124 cr - rights issue
Total - Rs 1,68,818 cr
If one adds the stake sale to BP in the petro - retail JV, then it would add up to Rs 1,75,000 cr.
EBITDA - 102000 cr vs 92000 cr. PAT at 44,324 cr vs 39,837 cr.
Retail revenues - 1,62,936 cr , up 25 pc. Retail EBITDA at 9,654 cr, up 55 pc
EBITDA margins up 130 bps at 6.6 pc
Jio Platforms - revenues at 68,000 cr vs 48,000 cr
Subscribers at 38.7 cr
EBITDA at 22517 cr vs 15,341 cr
Jio rolling out State of the Art wireline services across homes and enterprises. All this will lay strong foundation for offering platform based digital services. Jio has also consolidated all its Tech Capabilities, investments and connectivity business into a single holding company - Jio Platforms.
Refining and Marketing - Revenues at 3,87,500 cr , down 1 pc.
EBITDA at 24,460 cr , down 6 pc
GRMs stood at $ 8.9
Petrochemicals - Revenues at 1,45,264 cr , down 16 pc. EBITDA at 30,900 cr down 18 pc due lower margins in key products - paraxylene,MEG, PET, polypropylene, polyethylene.
Oil and Gas - revenues at 3,211 cr, down 35 pc. EBITDA at 353 cr vs 1642 cr last year. Domestic production was 38.8 BCF down 34 pc, US Shale production ( RIL Share ) - at 80.4 BCF down 15 pc.
Other income ( interest income ) - 13,956 cr vs 8,386 cr.
Fin cost at 22,027 cr vs 16495 cr
Depreciation - 22,203 cr , up 6pc - due new gasification and digittal services projects.
Consolidated Gross block at 631505 cr
Standalone - 334436 cr, Balance 2,97,067 cr of assets belong to Jio, Retail and Reliance holding USA.
Capex for the yr- 77,444 cr - in expanding digital and retail business, new petchem and refining investments
Area wise stores - electronics, fashion, grocery
North - 2022, 566,108
West - 2343, 538, 261
South - 2094, 932, 337
East - 2142, 350,91
Total Physical stores - 11,784 across 7000 + cities and towns. Plus there are digital channels, B2B channels.
Organised retail share of total retail mkt - 11 pc. This percentage is higher in electronics, fashion at 34 pc, 29 pc. Organised retail’s share in grocery at 3.8 pc.
Expected to grow to 17 pc by by Mar 2025. Expected growth rate - 21 pc CAGR over the next 5 yrs
Rel Retail - largest physical electronics retailer
Own electronics brands - LYF, reconnect , Jio Phone
Exclusive electronics brands - BPL, Sharp, Kelvinator
Reliance Trends - largest fashion retail chin in India operating over 1400 stores. Predominantly sells own brands. Own brands include - Netplay, Avaasa, Teamspirit etc. All these brands clock > 500 cr in revenues.
Trends small town - smaller fashion stores measuring about 5000 sq ft, adressing the needs of the whole family. Mainly targeted at tier 3,4 town. Trends small towns now having 240 stores.
Project Eve - Women’s only stores positioned in mid to premium segment.
Reliance jewels - Premium jewelry stores present across 60 + towns offering wide variety of jewellery collections. Total stores - 241.
Rel Multi Brand stores - over 650. Exclusive brand tie ups with - Mothercare, M&S, Armani, Diesel, Brooks Brothers etc.
Rel Retail Grocery - largest grocery retailer with 797 stores across 180 + cities, towns. Has 04 types of stores -
Reliance Fresh
Reliance Smart
Reliance Smart Point ( smaller version of Smart )
Reliance Market ( wholesale cash and carry stores, catering to hotels, kiranas, restraunts, caterers etc )- company operating 52 of these.
Own FMCG brands - **Snac Tac, Good Life, Expelz, Mopz, Graphite, Enzo **among others.
Key strengths- farm to fork value chain integration. Has tie up with tens of thousands of farmers, small vendors for efficient supply chain.
Petro Retail - Has 519 owned Petro retail outlets.
Connectivity retail - master distributor of Jio connectivity services. Comprises of 8100 Jio stores and vast network of retailers across the country for new customer acquisition and recharges.
Sales breakdown -
Consumer Electronics - 44,625 cr, up 14 pc
Fashion and lifestyle - 13,552 cr, up 24 pc
Grocery - 34,601 cr , up 48 pc
Connectivity - 55,943 cr, up 28 pc
Petro retail- 14,215 cr, up 7 pc
New stores in last one year -
Electronics - 605
Fashion and lifestyle - 500
Reliance Jewels - 143 ( almost doubled the store count to 241 )
Grocery - 98 Smart Stores
Acquisition - Hamleys
New JV - American luxury jeweller - TIFFANY , WOMO/ Bullfrog - premium men’s cosmetics brand, Exclusive partnersip with British Footwear and Handbag brand - Kurt Geiger
Future - Jio mart online platform. Also - Commenced whatsaap ordering.
Will try and cover the Digital, Media, Refining and Petchem businesses in my next post.
RIL - is an industry in itself !!!
Disc : invested from 1640 levels.
.
Notes from RIL 2019-20 AR -
Consolidated turnover - 659205 cr, up 5.4 pc
Consolidated EBITDA - 102280 cr, up 10.4 pc
Consolidated PAT - 44,324 cr cr, up 11.3 pc
EPS - 70.7, up 5.7 pc
Net Debt as on 31 Mar 2020 - 161000 cr. Total fund raising post 31 mar - 175000 cr. RIL now - net debt free
Employees - 1.95 lakh
Contribution to national exchequer - 1.15 lakh cr
Environment - saplings planted -2.2 cr
Rain water harvesting capacity since inception - 9.9 cr m cube
CSR expenditure - 1022 cr
REFINING and MARKETING -
Oil demand lowest since 2011. RIL continued to outperform singapore complex margins with a premium of $ 5.7 / barrel…signifigantly above 5 yr avg. Petro retail - diesel up -9.8 pc, gasoline up 14.7 pc.
Refining and marketing - revenues - 3.87,522 cr , down 1.6 pc.
EBITDA - 24,461 cr, down 6.1 pc
Petrochemicals -
Segment revenues at 145264 cr, down 15.4 pc.
EBITDA - 30,933 cr
Key products - paraxylene, Monoethylene Glycol, polyethylene terephthalate, polypropylene, polyethylene
Oil and Gas -
Three proctects in KG D6 block are on track to monetise discoveries. Peak production from these 3 fields expected to reach 1 BCP per day by 2023, about 15 pc of India’s demand that year.
JIO PLATFORMS -
Aims to provide solutions for -
**TELECOM, FIN SERVICES, HEALTHCARE, E- COMMERCE, EDUCATION, MEDIA AND GAMING , AGRICULTURE, SAMRT CITIES, GOVT TO CITIZEN DELIDERY, MANUFACTURING, HOSPITALITY **
**Jio Mart launched in 200 cities. Touching 5 lakh orders per day. **
****Jio POS lite initiated - 10 lakh agents on boarded for recharges and new aqquisitions. ****
****Strenghtened partnership and provided ininterrupted services to kiranas. ****
Launched AJIO - online fashion and lifestyle platform
Launched Jio Meet
RELIANCE RETAIL - Covered in previous post
Segmental stats -
Retail-
Sales - 1.62, 936 cr ( 24 pc of RIL’s consolidated sales )
EBITDA - 9654 cr ( 9.4 pc of RIL’s consolidated EBITDA )
Digital Services -
Jio - ranked no -1 by AGR and total subscribers.
Also rolling out state of the art wireline services across India. This will lay strong platform for offering platform based digital services. Company has consolidated all its tech capabilities, connectivity business into a single holding company - Jio Platforms.
Segment Revenues - 68,462 cr ( 10 pc of RIL’s consolidated revenues )
EBITDA - 22514 cr ( 22 pc of RIL’s consolidated EBITDA )
Total Retail + Jio platforms EBITDA at 32168 cr ( aprox 32 pc of RIL’s consolidated EBITDA )
And these two are fast growing, new gen , tech based businesses for the future
Refining and Marketing -
Revenues at 3,87,522 cr ( 58 pc RIL’s consolidated revenues )
EBITDA at 24461 cr ( 24 pc of RIL’s consolidated EBITDA )
GRM at $ 8.9 / barrel outperforming singapore complex margins by $ 5.7 / barrel
Petrochemicals -
Revenues at 1,45,264 cr ( 22 pc of RIL’s consolidated revenues )
Ebitda at 30,933 cr ( 30 pc of RIL’s consolidated Ebitda )
Oil and Gas - revenues at 3211 cr ( 3 pc of RIL’s consolidated revenues )
Ebitda at 353 cr ( 0.35 pc of RIL’s consolidated EBITDA )
For the yr, RIL’s share of domestic production was 39 BCF and RIL’s share of Shale production was 80 BCF - both down substantially , yoy.
Other Income - 13,956 cr ( primarily interest income )
Finance cost - 22,027 cr
Depreciation cost - 22,203 cr
EPS - 70.1 vs 66.8 in the PY
Fixed assets - 6,31,505 cr
Capex for the yr at - 77,444 cr - across all verticals like - digital services, petchem projects, refining business, organised retail.
Gross Debt on 31 Mar - 3,26,000 cr
Gross Investments ( liquid ) - 1,75,000 cr
And after that - the great fund raising of 1,75,000 cr took place…making reliance Industries Net Debt free
I ll try and cover the other aspects in the next post.
Disc : invested
Regards
Ranvir Dehal
Continuing with the RIL story -
JIO Platforms -
Still, smart phone penetration in India at only 65 cr users, constrained by avlb of affordable devices for lowest economic strata. No of feature phone users at 35 cr- using 2G/3G services.
Over last 2 yrs, Jio Phone has transitioned over 10 cr erstwhile feature phone users to 4G network. Rural smartphone penetration still low at 28 pc.
Jio wireless marketshare - 43 pc
Jio is No 1 service provider in 17 out of 22 circles across India. Circles where Jio is not No 1 are- Delhi, Mumbai, Karnataka, TN, Kerala
After the Investment of Facebook into Jio, Jio Platforms , Reliance retail and Whatsapp entered into a commercial partnership to accelerate reliance retail’s digital commerce business on Jio Mart platform using Whatsapp. This will help Kirana stores provide products and services to their catchment homes using Jiomart on Whatsapp
Microsoft’s Investment in Jio will promote adoption of Microsoft Azure cloud platform and Tech stack to its enterprise customers. Also, Jio will leverage the Microsoft’s Azure cloud platform to develop innovative cloud solutions focussed on the needs of Indian Businesses.
WIRED BROADBAND -
Increase in Broadband connections across in 2019-20 - 50 pc YoY, still overall penetration - abysmal at 7 pc.
Fiber to home ( FTH ) - being eyed as a huge greenfield opportunity for Jio. Aims to connect 5 cr homes and 1.5 cr enterprises across 1600 cities / towns.
Current Jio fiber connections - 10 lakh.
**Jio fiber to provide the following - **
High Speed internet
Home networking
Free HD voice
Security and Surveillance
TV Plus
Gaming
TV video calling
Music
Movies , TV shows, Videos on Demand
Jio’s rich Suite of Digital apps -
Jio TV - 680 channels, 15 languages
Jio Cinema - 10000 + movies, 1,20,000 + episodes, 60,000+ music videos
Ji Money
Jio news- 190 + live channels, 800+ magazines
Jio Savan - India’s no 1 OTT music app with 5.5 cr tracksacross 16 languages
Jio has done deep integration of Ji savan, Jio cinema, and Jio Cloud among othersinto Myjio to provide single window access to all apps.
Future expansion - education, healthcare, agriculture and e-governance.
MEDIA AND ENTERTAINMENT
Channels -
CNBC TV 18
CNBC Awaz
Colours
Colours Rishtey
Colours Cineplex
Colours Infinity
News India 18
News 18
CNN news 18
Comedy Central
History Channel
VH1
MTV
Total Viewership share at 12 pc
Digitals assets -
Moneycontrol
News 18
Firstpost
CNBC TV 18
BookmyShow
Publishing business -
Overdrive
Better interiors
Forbes India
Filmed entertainment -
Viacom18 studios
Jio Studios
Better Photography
Media and entertainment financials -
Sales - 5357 cr , up 4pc
EBITDA - 617 cr , up 200 pc. ( vs 102000 cr for RIL as a consolidated entity )
I ll cover the REFINING and MARKETING , PETCHEM IN SUBSEQUENT POSTS
Disc - invested
